Minnesota’s largest shared-solar project at Connexus Energy in Ramsey has rapidly sold out after the utility began offering a monthly payment option that’s more appealing and affordable to customers who want clean energy.
The sellout earlier this week represents a turnaround for the community solar garden completed in August 2014 by Connexus, the state’s largest local power cooperative. After the first year of operation, two-thirds of the project’s 792 solar panels had remained unsold as most customers balked at the $950-per-panel price to subscribe.
Then, in late November, the co-op introduced a monthly payment option — $20 extra to offset a customer’s entire home electricity with solar power. In six weeks, the solar garden was fully subscribed, utility officials said.
“It is classic marketing — getting your product and pricing in order — and it took off from there,” said Don Haller, vice president of member services, products and sales for the utility serving suburbs and rural areas north of the Twin Cities.
Now, the utility is considering what’s next in shared solar and is discussing ideas with Great River Energy, the Maple Grove-based wholesale power cooperative owned by Connexus and other Minnesota co-ops.
“We have found out that there is a segment of our membership that wants it, so we are trying to figure out the best way to deliver on that,” said Greg Ridderbusch, who was appointed Connexus CEO in October after serving as an executive at Great River.
Kevin and Cathy Palmer of Blaine are Connexus customers who signed up for 100 percent solar from their utility’s solar garden. They started off in 2014 by purchasing the output of six solar panels, which covered about 17 percent of their electricity use.
When Connexus began its monthly payment plan, the couple signed up to get the rest of their power from solar. They’re among 121 Connexus customers to sign up for shared solar. Like many others, they’re motivated by a desire to do something about reducing greenhouse gas emissions.
“It is a small but positive step toward transitioning away from fossil fuels into alternative, renewable energy,” Kevin Palmer said.
Paying for solar power
Solar gardens are designed for people who don’t want or can’t install rooftop solar panels. Customers instead subscribe to the output of a central array. The electricity doesn’t flow directly into their homes; it goes on the grid and the subscribers’ share appears on their electric bill. On summer days, the array’s high output exceeds what subscribers need, building up credits to offset power used at other times.
The first Minnesota solar garden went online in January 2013 at Wright-Hennepin Cooperative Electric Association in Rockford. Fifteen Minnesota co-ops now have them, and they are starting to roll out at Xcel Energy, the state’s largest utility, and Minnesota Power, based in Duluth.
Most solar garden programs, like Connexus’, started out with pay-upfront pricing. With panels costing hundreds of dollars each, homeowners could easily fork out $20,000 to go all solar. But more than half of the co-op solar garden programs now offer various pay-as-you go plans, according to the Clean Energy Research Teams, a University of Minnesota group tracking shared solar. “There just aren’t a lot a people who have a lot of cash to put down,” said Dan Thiede, CERTs communications manager.
Connexus is the first to offer a $20-per-month solar garden package, which is based on an average usage of 850 kilowatt-hours per month. Customers who want half their power from solar pay $10, and anyone can cancel at any time without penalty.
For solar garden subscribers, it works out to a 2.4-cent-per-kilowatt-hour premium over standard electric rates. Connexus’s nonsolar customers don’t pay higher rates to subsidize solar gardens — an approach taken by co-ops generally.
That differs from Xcel’s shared solar program, called Solar Rewards Community. Under state-regulated rates, all Xcel ratepayers subsidize solar gardens, which allows solar subscribers to save money on their bills. Xcel estimated that for each 100 megawatts of solar gardens added to its system, all customers will end up paying $12 million a year in higher rates. That’s on top of the $297 million, or a 9.8 percent, rate hike Xcel seeks over three years for other purposes.